Moody's Upgrades Uzbekistan's Rating to Ba2 with Stable Outlook

Tashkent, Uzbekistan (UzDaily.uz) — The international rating agency Moody's Ratings on 25 June 2026 upgraded the long-term issuer and senior unsecure debt ratings of Uzbekistan from Ba3 to Ba2, concurrently changing the outlook from "positive" to "stable."

The agency justified the rating upgrade by pointing to the steady strengthening of the country's institutional and economic framework, improved fiscal indicators, and the increased effectiveness of the policies being pursued. Among the key factors are diversified economic growth with average rates of around 6.9% over the past three years, a strengthening of fiscal discipline, and more efficient management of state contingent liabilities.

Following the results of 2025, GDP growth amounted to 7.7%, and in the first quarter of 2026, it accelerated to 8.7%. The economy is becoming increasingly diversified: alongside gold mining and the mining industry, a noticeable contribution is being made by the services sector, manufacturing, and construction. Remittances from migrant workers reached a record US$18.9 billion in 2025, an increase of 27%.

The fiscal deficit narrowed to approximately 2% of GDP in 2025 compared to more than 4% in 2023. This was facilitated by reforms in the energy sector, a reduction in subsidies, increases in electricity and gas tariffs to full cost-recovery levels, and the improvement of targeted social support mechanisms. Moody's expects that in 2026–2028, the deficit will remain below 3% of GDP, and public debt will stabilize at around 35% of GDP.

Additional support for the rating is provided by structural reforms in public administration, the liberalization of the energy sector, the creation of independent industry regulators, and progress in the WTO accession process. As a concrete example, the agency cited the dual listing of shares of the National Investment Fund of Uzbekistan (UzNIF) in May 2026, which attracted around US$691 million amid high interest from international investors.

Moody's also raised the country rating ceilings: in local currency to Baa3 from Ba1, and in foreign currency to Ba2 from Ba3.

At the same time, the agency pointed to persisting risks. The aggregate volume of potential state obligations related to state-owned enterprises and public-private partnership projects is estimated at approximately 25% of GDP. Despite a reduction in the share of preferential lending from 39% in 2020 to 19.2% by the end of 2025, state-owned banks still dominate the market. Among external risks, geopolitical tensions and a possible slowdown in reforms were named.

Among ESG factors, the agency highlighted environmental risks—water scarcity, soil salinization, and climate change—as well as the need for further improvements in the quality of education, healthcare, and housing provision. The main limiting factor remains the quality of public administration, which lags behind the level of many countries with comparable ratings, although the dynamics are assessed by the agency as positive.

Moody's links any further rating upgrade to the continuation of reforms, a reduction in the risks of state-owned enterprises and banks, and an expansion of the private sector's role in the economy.